On Project Upstream (Part 3): The Enabling Platform

In part 1 and part 2 of this series, I laid out my concerns with Project Upstream as it is currently structured, and a path forward in which Upstream becomes part and parcel of the MLS system. As I mentioned in those posts, the technology to do this is not science fiction. It exists today, and it can be implemented sooner, rather than later.

[As a caveat, I’m going to be writing about a company with whom I’ve been working since early this year. All of my work can be classified as a “charitable contribution” to date since it’s been for free, as I believe in what the company can bring to the real estate industry, but if this works out, I will benefit financially as well. I thought it important to make a full disclosure, so everyone knows where I stand on this. If you think I’m talking about these guys because of some future possibility of gain, go right ahead. But for myself, I think of it as providing free consulting and free help to a startup company that I think can (not exaggerating that much) save the real estate industry.]

The company is called Yodata, and it provides the framework, the platform, on which the vision of Upstream-within-the-MLS can be built. Let’s talk about them, and why I think they’re the right solution (if not the only solution) for the problems we are attempting to fix with Project Upstream.

This post is going to get a touch technical, so if you’re interested but would find all the blather about API and SDK and so on boring and confusing, skip on down to where I discuss the business benefits of the Yodata platform.

Brief Recap of Situation

I am a firm supporter of the goals of Project Upstream, which are:

Single point of entry

Eliminating data replication problems

Providing brokerages with total control over their data

My concern with Project Upstream as conceived of today (in which a company owned by a conglomerate of the largest brokerages and real estate companies in the U.S. partners with a wholly-owned subsidiary of the National Association of REALTORS to create and operate a single national database of listings) is that government intrusion is all but guaranteed. Project Upstream in its current incarnation has a difficult time avoiding being classified as a public utility.

The path forward, then, is for the MLS to implement the features and benefits of Project Upstream from within the already-established MLS infrastructure. The Modular MLS already provides most of the framework for doing this, and as it happens, many an MLS is willing to embrace the goals of Project Upstream and the overriding principle of Upstream which is: “MLS exists for the brokerages, not the other way around.”

We do this by moving from a vendor-centric data model to a customer-centric data model, leveraging and extending open data standards like RESO Data Dictionary and WebAPI. When the brokerage enters and maintains data within its own database, and grants access to vendors, as opposed to entering data into the vendor’s database, all of the benefits and goals of Project Upstream can be realized.

Since the MLS has already been through the trial-by-fire of the public utility debate back in 2006, this distributed model of Project Upstream has far less risk of government interference. It also creates a real partnership between the MLS community and the brokerage community, which is sorely needed, as opposed to setting up conflicts within the industry.

Yodata’s novel approach to the problem is not just the best solution, but may in fact be the only solution. Let me explain why, but first, what does Yodata actually do, and how does that platform actually work?

On Yodata

As I’ve stated above, I’ve been working with Yodata since almost the start of this year, when I met two of the founders — Dave Duran and Derek Overbey — at Inman New York.

The two of them have very deep roots in the real estate industry, and Dave in particular has been through all of the pain around data management that brokerages feel. Dave is a 20-year veteran of the real estate technology space, which means he has plenty of data-related scars to prove it. He’s the creator of AgentAchieve, one of the first enterprise CRM systems for real estate companies, and has been working with mid-sized and large brokerages for years and years. So he knows first hand just how painful the problem of data management in real estate is. It was in trying to solve that problem that Dave and his partner came up with the idea.

What Yodata provides is a platform for collaborating on data standards and open-source tools that dramatically improve the process of creating standards-compliant software for developers.

The best solution to data management and data portability problems is clear data standards. When everyone, from brokers to agents to vendors to the MLS, uses the same data standards to define a property, define a listing, define whatever, then all of the data is in one format. That allows for portability, easier integration, and innovation. This is the goal and the work of RESO (Real Estate Standards Organization) which has been engaged in yeoman’s work of trying to get the RETS (Real Estate Transaction Standard) data standard adopted by everyone.

The Yodata guys are passionate supporters of RESO, which makes me happy because I am as well. I remember lengthy conversations years ago with people like Rebecca Jensen, now CEO of MRED, and Art Carter, CEO of CRMLS, about the importance of a single data standard for real estate.

The only trouble with data standards is that it takes years and years of work to define, and it is difficult to have implemented. RESO is the perfect example. It started work in 1999, and hundreds of people volunteered their time and energy to create something that really works and is really valuable. But in May of this year, nearly sixteen years after RESO started working on the problem, NAR’s MLS Policy Committee changed §7.90 of the MLS Policy Statement in one key way:

The integrity of data is a foundation to the orderly real estate market. The Real Estate Transaction Standards (RETS) provide a vendor neutral, secure approach to exchanging listing information between the broker and the MLS. In order to ensure that the goal of maintaining an orderly marketplace is maintained, and to further establish REALTOR® information as the trusted data source, MLS organizations owned and operated by associations of REALTORS® will comply with the RETS standards by December 31, 2009,andimplement the RESO Standards including: the RESO Data Dictionary by January 1, 2016; the RESO Web API by June 30, 2016 and will keep current with the standard’s new versions by implementing new releases of RETSRESO Standardson at least one of the MLS’s servers within one (1) year from ratification. Compliance with this requirement can be demonstrated using the Real Estate Standards Organization (RESO) compliance checkerCertification Process. (Amended 11/0914) M

That change, from “comply with the RETS standards by December 31, 2009” to a far more specific “implement the RESO Standards including the RESO Data Dictionary by January 1, 2016; the RESO Web API by June 30, 2016” is important because the truth is that many an MLS claimed to be in compliance but hadn’t actually implemented anything. Since the “M” at the end of that means this policy change is Mandatory for all NAR-controlled MLSs (the vast majority of them), we will finally see (hopefully, if nothing else goes wrong, and if vendors and the MLS actually follow through) RESO Data Standards be adopted across the board.

But, If We Have RESO, Why Do We Need Yodata?

A reasonable question — and one that I asked the Yodata guys when I first started with them — is why we’d need Yodata at all when RESO exists and compliance and implementation are now mandatory.

There are three reasons why.

First, as I mentioned, Yodata is a passionate supporter of RESO. They think they have some tools and technology that really advances the mission of RESO, and helps the MLS, its vendors, and related developers with implementation. (For example, Yodata’s “One Click” code generation for server code and SDKs really helps vendors and the MLS implement RESO Standards.) Yodata will do nothing to undermine RESO in any way, shape, or form.

Second, RESO is and will be the data standard for real estate property listings. But RESO Standards do not yet cover many other areas connected to the real estate industry. Three key examples are transaction management data, public records data, and CRM data. RESO may eventually start to establish data standards for real estate in those areas, but if its work with property listings is any indication, such work will take years and years to complete. Yodata’s data standards management/sharing platform accelerates that process. Computer programmers know what Github does for software development; Yodata wants to be the Github for data standards which accelerates and simplifies the development and implementation of data standards across multiple companies, vendors, customers, and users.

Third, and in a way most important for our purposes, RESO is about data standards and data transport: what the definitions are and how data can be moved back and forth. It does not address — and I think should not address, since the issue is so far afield from RESO’s mission — the issue of data storage.

Remember from Part 2 and from the recap above that one of the key ideas for Upstream-Within-the-MLS is to move away from the concept of the MLS having an actual database and move towards the concept of the MLS being a sort of directory to brokerage databases.

MLS As Directory

Yodata’s platform — all of the data standards management tools, the API publish/share/manage technology — is built around enabling this vision of “customer-centric” data storage. As long as the vendors and the customers are using common standards for data schemas and APIs, it makes no difference where the customer’s data is stored. (There are exceptions, but I may discuss those in a later post.)

The brokerage (customer) can choose to have its data stored in-house, stored in the Cloud, stored with its franchise, stored in the MLS-provided data storage, or even have Yodata provide it data storage. It’s up to the brokerage what they want to do. All of its vendors — including the MLS — operate on the same Platform, using the same data standards (RESO + whatever else), using the same published/shared APIs.

Now, in many cases, the brokerage isn’t going to get into the business of figuring out where to store data. They’ll continue to use the MLS software, and the vendor (say CoreLogic) will host their data in its database as they do today. However, because CoreLogic will also be RESO Standards compliant (every MLS has to be), and through the Yodata platform, those standards as well as other data standards are extended and implemented easily across multiple vendors, the customer may choose to store its data wherever it chooses.

This is not science fiction. The technology works, today, and Yodata is working on a few beta proof-of-concepts right now. What Yodata needs is to be embraced by the real estate industry, because it solves so many of our problems.

So… Why is Yodata the Only Solution?

For those of my readers who are more technically inclined, and have questions about the actual technology, I’d recommend contacting the Yodata guys directly for a much fuller, much more detailed explanation than your humble blogger scribe.

But let me turn to the non-technical folks, who may need to make some decisions about Upstream. I stated above that Yodata is not merely the best solution, but may in fact be the only solution. Why?

The reason is the internal politics of the real estate industry. Fact is, the real estate industry is unique in the annals of American business history as a model of coopetition: fierce competitors who cooperate every single day. Because of that, one of the hallmarks of companies in the industry is extreme sensitivity to the issues of Power and Control.

A single national database owned and controlled by a select group of brokerages and NAR is obviously going to have enormous power and control over real estate data. That in turn raises hackles in parts of the industry.

But even a “data platform” that is owned and controlled by the select few results in the same fears, same concerns, same conflict. Undoubtedly, RPR will be RESO compliant; its APIs will be useful to brokers, to the MLS, and to developers. But it will most likely be a proprietary API and a proprietary controlled development environment that RPR will spend millions of dollars to develop and maintain. (Think Apple iOS and the AppStore.) If competing solutions to the RPR AMP/Upstream emerge — and I suspect that companies like CoreLogic are not sitting around waiting to be rendered impotent — those will also be proprietary APIs and development environments.

Open Source

Yodata borrows ideas and processes which have helped drive the incredible adoption of open source software and applies them to open data standards. Yodata does not own the standards, the creators and publishers remain the legal owners and agree to share them per the terms of standard open licensing agreements.

Yodata’s approach is to embrace open source. Yodata borrows ideas and processes which have helped drive the incredible adoption of open source software and applies them to open data standards. Yodata does not own the standards, nor does it own any API’s or software created using its tools. The creators and publishers remain the legal owners and agree to share them per the terms of standard open licensing agreements. They share for the same reason that brokers agree to cooperation and compensation: because they benefit when others share their work and collaborate on code (Github) and on data standards (Yodata).

There is no scenario under which Yodata will lock a developer out from using its platform, because it fundamentally does not “own” that platform — the community of developers who use it “owns” that platform.

All of the Power and Control resides, ultimately, in the hands of the data owners: the brokerages in our case. I think that’s how things should be.

Zero Conflict of Interest

All of the possible technology providers today have one or more areas of possible conflict of interest.

Any MLS vendor — CoreLogic, LPS, FBS, etc. — are obviously conflicted. RPR, as great as they are, has some conflicts of interest as well since it is owned by NAR, which has great interest in controlling the management and flow of data.

Clearly, any of the portal companies (don’t forget that Zillow owns Retsly and Move owns Listhub) has a conflict of interest. Any real estate technology vendor, whether a CRM company, a transaction management company, a lead generation company, etc. etc. all have conflicts of interest: they’re trying to sell products and services to brokerages, MLS, agents, etc.

Yodata has no such conflicts of interest, because it has no other lines of business. There’s no wondering what other products or services Yodata is trying to sell by providing this open data standards platform. There is no wondering what hidden agendas it might have. It’s a startup with a vision that extends well beyond the bounds of our industry, envisioning a world where everyone can own and share their data (like health care records). But because of their roots in the real estate industry, and because of their awareness of the significant problems with data management within real estate, Yodata wants to start here.

None of the players in Upstream or in the industry needs to worry about Yodata suddenly becoming a competitive advantage for a rival. Given the importance of internal politics in the industry, I consider that to be a major advantage.

And given the recent concerns within the industry because of Zillow’s acquisition of Dotloop, I feel compelled to point something out here. There is no scenario in which any company within the industry would acquire Yodata and suddenly get its hands on all kinds of broker data. Remember, Yodata does not “have” any data: its entire vision is that data is owned by the individual broker/MLS/customer no matter where that data resides. The data standards that Yodata wants to help create are not owned by Yodata; every one of those is open source and freely available to any developer who is participating. Sure, a company could acquire the tools and the technology that Yodata has built to create the community of real estate software developers, but it cannot acquire that community, and it cannot acquire any data.

Indeed, the vision and the promise of Yodata is precisely the opposite. No matter what vendor gets acquired by whomever, the open data standards model means the acquirer never gets its hands on any customer data. Customers own their data, period, end of story. I consider that to be a major advantage.

Even the existing UpstreamRE LLC and RPR are not competitors to the Yodata platform; indeed, they are important constituents. There is absolutely no reason why Upstream/RPR couldn’t be one of the biggest participants in the real estate open data standards movement. There is no reason why brokerages who are members of UpstreamRE could not use RPR as they intended to: store data, input listings, manage syndication, manage data, and so on and so forth. The Yodata “Upstream-Within-the-MLS” model is no threat whatsoever to UpstreamRE + RPR; indeed, it becomes a helpful tool to UpstreamRE +RPR to accelerate data standards and API development and implementation. And since Yodata’s platform fully incorporates and embraces RESO Standards for listings, but enables RPR/Upstream to start implementing non-listings data (e.g., CRM data, transaction management, etc.), it extends and expands the capabilities of RPR/Upstream beyond what it is today.

In all my years in real estate, I have never seen such a win-win-win-win situation. Yodata has the potential to eliminate so many of the conflicts within the industry. At a strategy meeting a few months ago, we were joking that the motto of Yodata should be “Kum-bah-Yo” because everything we’re trying to do is about bringing peace, harmony, and collaboration to a fractious industry of competitors. And that’s why I agreed to work with Yodata, and why I continue to do so.

Conclusion

Project Upstream is something whose time has come. The industry should embrace it and support it. But it should do so with a larger vision in mind that goes beyond just listing data, and in a way that minimizes intra-industry conflict and governmental intrusion.

Yodata’s novel open source approach is, I believe, the answer. As the only neutral, un-conflicted, transparent, and open source-based solution available today, it can bring all of the various parts of the industry together as partners, rather than setup sides and factions. The technology is real, it works, and it needs — and deserves — the support of the industry.

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

9 Comments

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So is the intended longterm revenue model for Yodata services/consulting/support?

I think the idea of a 100% open source driven industry is phenomenal, but it ultimately has to get built and paid for in some fashion. WordPress is incredible software, it’s totally 100% open source, but it wouldn’t survive were it not for the tens of millions of dollars it generates for it’s various contributors and caretakers, and the myriad well fed developers that feed their talent into the code. This money comes from VaultPress, WordPress VIP and countless other sources.

I can see how Yodata could remain completely impartial, but it needs to have cashflow from somewhere in order to breathe. Just curious where that will come from.

We intend to make money primarily though the sale of hosted Yodata services for data owners who don’t have and/or don’t want to host their own servers.

We believe independent ownership and control of one’s data is a basic human right and open source data management tools are essential for individual privacy and freedom in the future. So we believe the scale will be there to support the business in the long-term.

Patrick I agree and as with anything I worry when any major real estate player has their finger in the pie how it will effect the ‘little guy’. I’m confident funding can be gotten via title, insurance, home warranty companies etc..Interesting concept. ~Sherry

What’s going to be such an urgent urgent problem for these players to allocate money/resources to implement / switch to an open source platform? How do you convince the industry to do this now, rather than 5 years from now? Is there an urgent opportunity they are going to miss out on if they wait?

I’m not sure. I don’t know many MLS people to know how they think about this firsthand. But it seems history shows many of them aren’t a progressive bunch, so I’ll wager a guess they are going to need a fairly urgent issue to get them to act.

RSH~ I love it! And I am with you- I am a firm supporter of single point of entry, elimination of data replication problems, and providing brokers with total control their data! But more importantly, I say we need to get rid of the portals that have a conflict of interest! With the technology we have before us, we have the ability to make sure all potential buyers find our listing data online… We do not need our data information being given to the Z Groups of the world, especially when their ONLY motive is to sell it back to us for a profit… I embrace a project upstream with open arms, and I say it is about time we put the Z Groups of the world on notice. We did not need the Z Groups before they entered the marketplace and “for sure 110%” we don’t need them today!

I am fan of the concept and do think the solutions YoData bring forth certainly address much of the data control, replication, syndication rights and other areas of controversy that have emerged over the years that point to the ultimate question of “who’s data really is it?” Standardization and open source are great for innovation and the industry as a whole. Politics aside, Yodata can be great solution for the real estate and healthcare industry. Can we all scream for Yodata Upstream?